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Vudu launches proprietary set-top box Movie stream/download service

Silicon Valley startup Vudu will start taking orders tomorrow for its proprietary set-top box, which will allow users to stream or download up to 5,000 movies onto their TV sets over a broadband Internet connection. The box is priced at $399 through www.vudu.com and Amazon. Vudu operates similar to a peer-to-peer service. In a P2P […]

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Silicon Valley startup Vudu will start taking orders tomorrow for its proprietary set-top box, which will allow users to stream or download up to 5,000 movies onto their TV sets over a broadband Internet connection.

Vudu operates similar to a peer-to-peer service. In a P2P network, movies or other large files are downloaded from a number of fellow P2P users with a computer connected to the Internet that already have the file on their computers. This means files can be sent faster than those downloaded from one central server.

On Vudu’s service, files will be transferred across a private network. Vudu will send bits of files of popular movies to different users’ Vudu boxes. When a user clicks to watch a movie, the file is then sent from those other Vudu boxes. Since the files are sent between Vudu boxes only, the company says they can provide better copy protection and ensure a file is sent with the pieces in order so the user can watch right away.

Movies are streamed, though some can be downloaded and saved on the box for future viewing. Only movies downloaded from Vudu will play on the Vudu box. Other than the initial purchase of the set-top box, the service does not require a subscription. The cost of movie rentals and purchases are on parity with retail prices and DVD rentals, with rentals running between about $1 and $4 and purchases between $5 and $20.

Films will be transferred in DVD quality and upconverted by Vudu boxes to high-definition, similar to the way an upconverting DVD player works.

Company co-founder Tony Miranz said the movies, once ordered, would be available to begin viewing in a matter of "two to three seconds."

Vudu has signed deals with all seven major studios and more than 20 independent and international distributors, which will give users access to new releases when they go to video as well as the studios' entire back catalogs, he said.

The box is capable of storing 50 movies. The company is exploring other forms of storage capacity including possible DVD burning or expandable hard drives.

Vudu, which was formed two years ago by Miranz and legendary entrepreneur Alain Rossman, has received two rounds of venture backed capital totaling more than $21 million.

"We're well capitalized and poised to have a very successful launch," Miranz said.

However, the company faces much larger competitors, including Microsoft, Amazon and Apple all of which recently launched new ways to deliver downloads to the TV.

MovieBeam and Akimbo also offer downloads on their own proprietary set-top boxes.

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